$1.29 songs dropping on iTunes charts

updated 03:40 pm EDT, Fri April 10, 2009

by MacNN Staff

1 29 iTunes Songs Falling

The institution of variable song prices on iTunes has directly translated to a decrease in the popularity of the more expensive songs, Billboard finds in a short-term study of the immediate wake of the change. Those songs that were boosted to a $1.29 price typically fell 5.3 places on iTunes' Top 100 charts on Wednesday and another 2 places on Thursday. In exchange, those songs that kept their 99-cent pricing rose an average of 2.5 spots on Wednesday and 1.7 on Thursday.

In some cases, the changes were enough to push certain songs off the chart altogether. How 69-cent songs have been affected isn't clear, though these are usually older or less popular titles that are unlikely to chart.

The music charting organization notes that the price increases don't automatically translate to lost revenue for labels but that it doesn't necessarily take a steep drop in unit numbers to swing to a loss. A 23.3 percent loss in the number of songs sold is enough to nullify the advantage of a price increase.

A similar study has yet to be conducted on other stores that have also agreed to variable pricing in return for protection-free songs, such as Amazon and Walmart.

With less than a week of sales, the long-term effect of the price cut has yet to be determined. Billboard also warns that other factors can affect the songs' positions. However, the initial results appear to support views that variable pricing is more likely to deter single-track sales of popular songs.

This isn't surprising. The record labels just can't seem to get it, and stay super-short-sighted. For me, knowing I could get a track for $0.99 meant that I never really questioned it. I went and bought it legally and easily. Now, I'm not sure what it will cost, so I have to go look and think about it if the price isn't $0.99. That is enough time for me to talk myself out of the purchase or think about, um, alternative acquisition methods. Cough cough.

Really, record execs, you consistently cut off your nose to spite your face. For once in your industries history, wake up and take advice from people who get. You can be angry with Steve Jobs or think he has too much power, but he was right, and so were the others who followed the fixed price purchase model. Subscriptions never worked, and variable pricing never worked. You're all about to see your only hope get crippled.

By allowing price increases to take place, Apple was willing to bet that exactly this happened: lower priced songs faired better, and appears to have sold more. Let's hope the recording industry is paying attention. Just because they can sell at 1.29 doesn't mean they should.

They're not cutting off their nose to spite their face, they're complaining about the food on the rescue helicopter that picked them up and threatening to jump out and find a quieter rescue boat because they're so important one is bound to come. This after the iceberg they were sitting on that they insisted would never melt did.

I'm not actually sure this will bear out over the long run, but it would be kind of awesome if they ended up crippling their own profits this way. Either that or just driving artists away from them entirely so they can set their own price on iTMS and elsewhere.

Now, many of us (including me) will cheer when the last soulless conglomerate record company shutters. But I'm sure the model is to hurt a lot of artists and others on the way down, and I don't look forward to that, so here's a secret clue:

I see a new commercial coming. Mom and son go shopping for music, they look around on iTunes listening to clips so they can figure out what they wanna buy, in the end they decide that Britney Spears song sounds cool but that extra 30 cents just doesn't seem worth it, so they're gonna go with a 99 cent Switchfoot track! And guess what it's a 99 cent song!

Btw thankfully none of the artists I like are on the billboard for the most part, so they're all still at 99 cents. I had to put out some effort to find a 1.29 cent song because most of those seem only to be on artists I turn the radio off for.

Hey, at least you don't buy much of your music on iTunes Japan where the songs cost 150 to 200 en (yen) each. Currently, that is $1.50 to $2.00 a song, but it is still cheaper than importing the music, unless you buy the entire album.

The BIG problem with iTunes Japan is they have not switched over to 100% DRM-free music. Only a small portion is iTunes Plus. But, until iTunes U.S. carries a full selection of Jpop, many of us don't have a choice.

If this decline continues (and it will), you'd think the next logical step would be to either discontinue the variable pricing or to increase the quality of the $1.29 tracks (artist photos, media or lyrics). Who wants to bet that the record companies blame this on Apple somehow and think up an even dumber solution to their problem like increasing the price even more to make up for the drop-off in sales??

If this decline continues (and it will), you'd think the next logical step would be to either discontinue the variable pricing or to increase the quality of the $1.29 tracks (artist photos, media or lyrics). Who wants to bet that the record companies blame this on Apple somehow and think up an even dumber solution to their problem like increasing the price even more to make up for the drop-off in sales??

the record companies are desperate to find reasons to exist... this was just a legal ploy... using their power to control the pricing... for no other reason than to have control... and here is the result... a further affirmation that these dinosaurs have run their course... they are like Wall Street... bloated revenue-suckers... the last dinner guest who just refuses to leave.

By allowing price increases to take place, Apple was willing to bet that exactly this happened: lower priced songs faired better, and appears to have sold more. Let's hope the recording industry is paying attention. Just because they can sell at 1.29 doesn't mean they should.

First off, I've been maintaining Apple should allow the RIAA to price music any way it wants for a while now because it would show the RIAA it was wrong. But, hey, don't give credit to me....

Secondly, most of you have dual yet mutually exclusive wants. You want cheaper music, and you want the RIAA to go somewhere and die (OK, you have a third want involving me, but that's not part of the article).

If the RIAA lowers prices, all it will do is drive more people to buy music, and, thus, more money going to the labels (just liek you argue). So what we want is for the labels to ratchet up those prices to CD-single costs, force Apple and the others into stupid combo 'specials' and other things, and watch the sales dry up and the labels whither and die.

To help it along, after a short while, you wait for the parasites you love to hate (the lawyers, not the analysts) to start suing the labels for anti-trust and anti-competitive behavior and monopolistic business practices.

But you aren't going to get this if you keep insisting they drop prices ...

It would be really fun if they had variable pricing based on the song's position for store sales. The higher it gets, the higher the price gets. You could have the top track selling for $10. Of course, you'd see demand for that track fall, with another one to take its place.

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